Sotheby's Suing Chinese Collector for Non Payment

The Wall Street Journal has a good article on Sotheby's aggressive collection policy and unpaid lots. I have noted in the past about some of the Chinese mainland collectors, who for some reason get buyers remorse after large purchases.  Sotheby's has been rather to ensure payments, including requesting deposits on premium lots, and going after collectors in court.

The WSJ reports on Sotheby's suing a mainland Chinese collector who owes $3.5 million plus interest for 20 works purchased at a Hong Kong sale. According to the article, Sotheby's currently has 6 suits pending in Hong Kong courts.

The WSJ reports

Sometimes, getting China’s rich to pay up isn’t easy.

Just ask Sotheby’s, who on Tuesday said it was suing a man from mainland China for 27.5 million Hong Kong dollars (US$3.5 million) plus interest, an amount the auction house claims he owes for 20 works of art he won at a Hong Kong sale.

The lawsuit against Zhang Bo, whose address is in China’s Henan province, was filed over the weekend in Hong Kong’s High Court.

The works in question were all purchased at a sale of fine Chinese paintings in April. The most expensive of them is “Grazing Under the Tree” by Xu Beihong, which fetched HK$7.8 million at the sale, above the high estimate of HK$6 million. Mr. Zhang also bought “Calligraphy Couplet in Xingshu” by Zhang Daqian, one of China’s most sought-after painters, for HK$980,000.

In the document filed to the court, Sotheby’s said Mr. Zhang was the successful bidder for 20 lots for a total value of HK$34.1 million. But the owner of two of the works, who was not identified in the document, has decided not to pursue the case in court.

“Our lawsuits do not mean that we are experiencing more defaults than other auction houses,” said a Sotheby’s spokesperson. “It just means that we take our obligations to our consignors seriously.”

To prevent nonpayment situations, major auction houses in Hong Kong require bidders for the most expensive items to pay HK$1 million deposits in advance. Sotheby’s currently has six outstanding cases in Hong Kong courts, and has filed 13 since 2006.

Source: The Wall Street Journal